Postal and communication strategies within local authorities.
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1 Postal and communication strategies within local authorities. A White Paper from Neopost Cut Costs Improve Productivity Communicate more effectively Manage the mail process 2012 Neopost Page 1
2 Introduction Following the 2010 Spending Review, in which Chancellor George Osborne announced public sector cuts of 81 billion, central and local Government have come under great pressure to save money and make existing operations more efficient. At the same time, they are being encouraged to shrink their carbon footprint as part of a wider, legally binding commitment by the Government to cut greenhouse gas emissions by 80% (from 1990 levels) by 2050, with an interim target of a 34% reduction by The scale of the financial and carbon savings involved has forced managers to re-assess all aspects of their operations, including postal communications, an area already undergoing significant change due to the rise of electronic messaging, the decline in postal volumes and the emergence of new service providers following liberalisation of the postal market in Mail is a significant area of government expenditure: the Government Procurement Service (GPS) has calculated that the wider public sector spends more than 650 million each year on postage and postal services and that smarter procurement could cut these costs by between 9% and 30%. Despite its many qualities and effectiveness as a communication medium, physical mail is also a source of greenhouse gas emissions. Mail is a significant area of Government expenditure... Using mailing equipment and software to make mailing processes more efficient and less wasteful can clearly help public sector organisations with their cost- and carbon-cutting agenda. But to what extent is investment in the post room being integrated with these wider aims? Postal & Communications Strategies Surveys 2012 Earlier this year, Neopost commissioned the Government Policy Hub (GPH) to carry out a series of surveys to build a detailed picture of the current state of postal & communications strategies within local authorities and to gauge the opinions of those whose job it is to develop and implement them. The first of these, published here, focuses on postal and communication strategies within local authorities, which account for almost one third of the public sector's total annual expenditure on mailing. In March 2012, GPH developed a 21-question survey which it sent to 5,000 A, B and C-level executives in more than 480 organisations throughout the UK. This generated a total of 248 complete responses from 38% of the local authorities targeted. All responses were reviewed and consolidated to produce the findings published in this white paper. Page Neopost
3 Postal & Communications Strategies Survey 2012: Local Authorities Executive Summary Cost cutting is at the top of the agenda for local authorities, but the failure of many to develop a comprehensive postal and communications strategy could prevent them from making the most of opportunities to save money and increase the effectiveness of postal and digital communications. More than half the respondents to the first Neopost Postal & Communications Strategies Survey 2012 have reduced their postal budget in the last 18 months and 60% expect further cuts in the next year and half. In addition, a majority of respondents plan to reduce volumes of both incoming and outgoing mail over the next 12 months. These developments have serious implications for how local authorities communicate with the public. Yet, fewer than one in five has a written postal and communications strategy to help manage the transition to an integrated communications infrastructure that will be necessary as local authorities encourage people to switch from postal communications to digital channels in line with Digital Britain s 2020 vision. This is despite the fact that local authorities are already integrating mail processes with the broader information and communications technologies (ICT) infrastructure. Ten per cent of respondents have already centralised postal and electronic communications and more than half (54%) are either in the process of doing so or are actively gaining an insight into the subject. Fewer than one in five has a written postal and communications strategy... Carbon reductions A similar pattern is evident in local authorities approach to sustainability and carbon reduction strategies. Highlighting the impact that communications choices can have on greenhouse gas emissions, 70% of respondents plan to eliminate waste from mailing processes and a similar proportion expect to reduce mail volumes Yet, just 4% of respondents said that they had aligned postal communication services to meet carbon reduction targets, with another 4% in the advanced planning stage. Working in isolation Local authorities regularly engage with suppliers to find out about new mailing solutions, but still prefer in-house knowledge to external expertise when developing a postal and communications strategy: just 6% of local authorities have enlisted external advice when creating a strategy, with a further 5% planning to do so. This raises the question of whether local authorities could work more closely with suppliers to ensure that targets for efficiency savings and productivity gains are met Neopost Page 3
4 Postal Communications Strategies Fewer than one in five local authorities (17%) already has a written postal communications strategy, despite the National Audit Office s recommendation that all public sector bodies should work towards developing one. Even so, the survey findings suggest that awareness of the benefits of having a strategy is increasing: half of existing policies have been written in the last 12 months and a further 12% of local authorities are currently in the process of creating one. In-house knowledge is preferred to external expertise when developing a postal communications strategy, with just 6% of local authorities having enlisted external advice when creating a strategy and 5% expecting to do so. This raises the question of whether more organisations would have written policies if they made more use of external expertise. Q. Have you developed a postal communications strategy? Yes: 42 (17%) No: 111 (45%) Not yet written: 29 (12%) Don t know: 66 (26%) Q. If yes, when was it written? Under a year ago: 22 (9%) 1-3 years ago: 21 (8%) Over 3 years ago: 4 (2%) Don t know: 201 (81%) Q. Have you or will you use external expertise to prepare the strategy? Have used: 14 (6%) Will use: 13 (5%) Don t know: 152 (61%) Will not use: (28%) Page Neopost
5 Postal Services Budgets Despite the rising cost of postage, local authorities have seen significant reductions in postal budgets over the last 18 months. Less than a quarter of respondents said that their budgets were unchanged, compared to 30% that have seen cuts of at least 10%. As many as 6% have had their budgets reduced by more than 35%. This trend is set to continue over the next year and a half, with 28% of local authorities anticipating reductions of 10% or more. Just 12% have no plans to reduce postal budgets over the next 18 months. Q. By how much have you reduced your postal services budget over the last 18 months? Not reduced: 43 (22%) 1-5%: 15 (7%) 5-10%: 27 (14%) 10-20%: 38 (19%) 20-35%: 11 (5%) More than 35%: 12 (6%) Don t know: 53 (27%) Q. By how much do you expect to reduce your budget over the next 18 months? No plans to reduce: 23 (12%) 1-5%: 17 (9%) 5-10%: 42 (21%) 10-20%: 34 (17%) 20-35%: 18 (9%) More than 35%: 5 (2%) Don t know: 60 (30%) 2012 Neopost Page 5
6 Mail Volumes Local authorities depend on the post to communicate with residents and businesses. More than one third of those surveyed send more than 200,000 items each year and almost one in 10 send in excess of one million items. However, almost three quarters (73%) of local authorities expect to send fewer items over the next 12 months. More than half (57%) expect to receive less incoming mail, too, as the public choose to communicate by electronic methods. Despite the importance and cost of mail to local authorities, almost one third of respondents don't know how many items of mail they send each year. Q. How many items of mail do you post on average per year? Less than 10k: 6 (4%) 10-50k: 14 (9%) k: 20 (12%) k: 15 (9%) k: 29 (18%) 500-1M: 13 (8%) More than 1M: 14 (9%) Don t Know: 50 (31%) Q. Do you plan to increase or decrease outgoing mail over the next 12 months? Increase: 6 (4%) Don t know: 37 (23%) Decrease: 118 (73%) Q. How many items of post do you receive on average per year? Less than 5k: 6 (4%) 5-25k: 14 (9%) 25-50k: 6 (4%) k: 14 (9%) k: 19 (12%) k: 9 (5%) Over 500k: 18 (11%) Don t know: 75 (46%) Q. Do you plan to increase or decrease incoming mail over the next 12 months? Increase: 5 (3%) Don t know: 65 (40%) Decrease: 91 (57%) Page Neopost
7 The Post Room in Local Authorities Post rooms in local authorities are still largely operated and managed in-house. Despite the trend for outsourcing non-core services, such as print, and third party providers promise of efficiency and cost-savings, just 3% of local authority mail rooms are fully outsourced, compared to 77% that are run internally. However, there is evidence of some flexibility, with more than one in 10 post rooms run either as a shared service with another organisation (4%) or as a partially outsourced operation (8%). The fact that four out of 10 local authority post rooms serve five or more sites may be a contributory factor to growing interest in the digitisation of incoming mail (see page 9). Q. How many sites does your post room service? 1-5: 76 (49%) 5-10: 17 (11%) 10-15: 7 (4%) More than 15: 37 (24%) Don t know: 18 (12%) Q. How many staff are employed in the post room? 1-5: 83 (54%) 5-10: 33 (21%) More than 10: 17 (11%) Don t know: 22 (14%) Q. What best describes the status of your postal service? Shared service: 6 (4%) Run internally: 120 (77%) Outsourced: 5 (3%) A combination: 12 (8%) Don t know: 12 (8%) 2012 Neopost Page 7
8 Postal communications & the environment Mindful of the need for more sustainable and cost-effective business practices, seven out of 10 respondents say that they are making efforts to reduce waste from mail processes. Perhaps due to the small number of organisations that have a written postal communications strategy, few have aligned such efforts with formal carbon reduction targets. Just 4% of respondents claim to have done so and a further 4% are in the advanced planning stage. Even so, awareness of the need to so do is high, with four out of 10 respondents either actively gaining insight into the issue or recognising that more planning is needed. Q. To what extent has your postal communications service been aligned to meet upcoming legislation targets around carbon reduction? Not yet: 42 (28%) Gaining insight: 28 (19%) More planning needed: 30 (20%) In advanced planning: 6 (4%) Fully aligned: 6 (4%) Don t know: 37 (25%) Q. Are you exploring ways to reduce controllable waste further? No: 9 (6%) Yes: 105 (70%) Don t know: 35 (24%) Page Neopost
9 Mail & Digital Communications Recognition of the economic and productivity benefits of integrating physical and digital mail and offering customers a choice of communication method has made it a key focus for local authorities, with just 3% of respondents stating categorically that they would not centralise physical and digital mail. Although just 10% of respondents have already completed the process, more than half (54%) are either in the process of centralising postal and electronic communications or are actively gaining an insight into the subject. Similar takeup levels are recorded for the digitisation and electronic routing of incoming mail: a quarter of respondents have already implemented or are in the process of implementing scanning in the mailroom, with a further 47% exploring its possibilities. Q. Has your organisation completed or are you looking into the centralisation of both physical and digital mail? Yes, completed: 15 (10%) In process: 29 (19%) Gaining insight: 52 (35%) No: 9 (6%) No, will not centralise: 4 (3%) Don t know: 40 (27%) Q. Has your organisation completed or are you looking into the digitisation of mail? Yes, completed: 7 (5%) In process: 26 (18%) Gaining insight: 68 (47%) No, probably not: 15 (10%) Don t know: 30 (20%) 2012 Neopost Page 9
10 Procurement Framework Agreements are the preferred method of procuring mailroom equipment and services, cited by 58% of respondents. Yet awareness of individual professional buying organisations is low, perhaps reflecting their regional nature. Pro 5, a partnership of the largest public sector buying organisations with a combined purchasing power of more than 2 billion per annum that aims to create national framework agreements for local authorities and the wider public sector across England and Wales, is recognised by just 7% of respondents. Q. Which providers have you talked to in the last 18 months with reference to innovations? FP Mailing: 19 (8%) Neopost: 52 (23%) Piney Bowes: 44 (19%) Royal Mail: 68 (29%) Don t know: 48 (21%) Q. Please select all the Framework Agreements you are aware of. ESPO: 51 (22%) GPS: 72 (31%) GPS Hybrid Mail: 33 (14%) Pro5: 15 (7%) YPO: 17 (7%) None of the above: 45 (19%) Q. Where available, are Framework Agreements your preferred procurement route? No: 7 (5%) Yes: 83 (58%) Don t know: 52 (37%) Q. If no, why? Not aware of any frameworks: 2 (28%) They don t offer value for money: 3 (43%) Prefer other routes: 2 (29%) Page Neopost
11 Mailroom Technology The potential of modern mailroom equipment to improve productivity and cut costs from every aspect of the mailing process, from the opening and processing of incoming mail to the use of franking machines to maximise postal discounts, is reflected in local authorities investment priorities for the next 18 months. The desire to speed up the processing of incoming mail, integrate it with electronic records and reduce the amount of paper circulating around a business is generating great interest in the digitisation of incoming mail (cited by 55%). This might also explain the high reading for mail scanners (51%), if respondents confused document scanners and mail security scanners. Franking machines, folder-inserters (enveloping systems) and address data verification all scored highly, as did secure , which combines the trustworthiness of a posted letter with paperless, electronic distribution. Q. Please select from the list, solutions you will be looking at over the next 18 months. Address data verification: 29% Address printers: 14% Digitisation: 55% Downstream access: 22% Franking machines: 37% Enveloping systems: 29% What Next? Letter openers: 15% Mail scanners: 51% Secure 28% Shredders: 16% To help local authorities identify how they can improve their mailing process, Neopost offers free, no obligation audits, from which we are able to develop bespoke communications solutions and strategies. For more information, please contact Antony Paul on or antony.paul@neopost.co.uk. About Neopost Neopost is the UK s and Europe s number one supplier of mailing solutions. Our products and services are sold in more than 90 countries and in 2011 we recorded sales of 1 billion euros. With expertise in traditional and digital communications, Neopost supplies the most technologically advanced solutions for franking, folding/inserting, addressing, logistics management and traceability, plus a full range of services, including consultancy, maintenance and financing solutions. We are the only manufacturer from the postal solutions industry to have served local authority purchasing consortia, central government and the wider public sector on successive framework agreements for 15 consecutive years. Neopost is an approved supplier to Pro5, a partnership of the UK s largest local authority professional buying organisations (CBC, ESPO, NEPO and YPO) with a collective spending power of 2 billion per annum. To find out more, please visit Neopost Page 11
12 Survey Participants Neopost and Government Policy Hub would like to thank the following organisations for taking part in the Postal & Communications Strategies Survey 2012: Local Authorities, with special thanks to those who took the time to offer additional insight through extra comments and observations. Aberdeenshire Council Adult Social Care, Wrexham CBC Armagh City and District Council Ashfield District Council Ashford Borough Council Babergh District Council Ballymena Borough Council Basildon Borough Council Boston Borough Council Bournemouth Borough Council Bradford Council Brent Council Brighton & Hove City Council Bristol City Council Broadland District Council Bromsgrove Borough Council Broxbourne Borough Council Bury MBC Cambridgeshire County Council Camden Council Canterbury City Council Castle Point Borough Council Central Bedfordshire Council Centro Cheshire East Council Cheshire West & Chester Council Chichester District Council Christchurch Borough Council City & County of Swansea City of Bradford MDC City of Lincoln Council City of York Council Comhairle Nan Eilean Siar Conwy County Borough Council Cookstown District Council Corby Borough Council Cornwall Council Council of the Isles of Scilly Coventry City Council Craigavon Borough Council CW & C Council Dacorum Borough Council Daventry District Council Derby City Council Derbyshire County Council Devon County Council Dundee City Council Durham County Council Ealing Council East Cambridgeshire DC East Hampshire District Council East Hertfordshire District Council East Northamptonshire Council East Riding of Yorkshire Council East Sussex County Council Eastbourne Borough Council Eastern Facilities Managament Solutions Eastleigh Borough Council Epsom & Ewell Borough Council Erewash Borough Council ESCC Exeter City Council Falkirk Council Fenland District Council Fife Council Gravesham BC Greater London Authority Hastings Borough Council Hertsmere Borough Council High Peak Borough Council Hinkley & Bosworth BC Improvement & Efficiency WM Improvement East Kent County Council Kirklees Council Lancashire County Council Lancaster City Council LBBD Leeds City Council Leicester City Council Leicestershire County Council Lewes District Council Lincoln City Council Liverpool City LB Barking and Dagenham Council LB Barnet LB Bexley LB Bromley LB Hammersmith & Fulham LB Harrow LB Havering LB Hillingdon LB Hounslow LB Islington LB Richmond LB Sutton upon Thames Maldon District Council Malvern Hills District Council Manchester City Council Mid Devon District Council Mid Suffolk District Council Middlesborough Council Midlothian Council Neath Port Talbot County BC New Forest District Council Newport City Council North Ayrshire Council North Dorset District Council North East Derbyshire DC North Hertfordshire DC North Lincs Council North Warwickshire BC North West Leicestershire DC Nottingham City Council Oldham MBC Perth & Kinross Council Purbeck District Council RBWM Redcar & Cleveland BC Renfrewshire Council Rochford District Council Royal Borough of Greenwich Rugby Borough Council Runnymede Borough Council Rutland County Council Sandwell MBC Scarborough Borough Council Sheffield City Council Shepway District Council Shetland Islands Council Slough Borough Council Somerset County Council South Ayrshire Council South Kesteven District Council South Lanarkshire Council South Norfolk Council South Somerset District Council South Staffordshire Council S Yorkshire Joint Secretariat S Yorkshire PSE St Edmundsbury Borough Council Staffordshire County Council Staffordshire Moorlands DC Stockport MBC Stoke on Trent City Council Suffolk Coastal District Council Swale Borough Council Swindon Borough Council Tamworth Borough Council TfGM Three Rivers Council Thurrock Council Wakefield Council Walsall Council Warrington Borough Council Warwick District Council Warwickshire County Council Watford Borough Council WCBC Welwyn Hatfield Borough Council West Berkshire Council West Oxfordshire District Council West Somerset District Council Western Education & Library Board Wigan Council Wiltshire Council Winchester City Council Wirral MBC Woking Borough Council Wokingham Borough Council Worthing Borough Council Wrexham County Borough Council Wychavon District Council Wyre Borough Council Wyre Council Neopost House South Street Romford Essex RM1 2AR Tel: Fax: Page Neopost
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